Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
To: Elasticity

Movements of the Supply Curve - 26

The supply curve is an upward sloping curve. This illustrates the assumption that a firm will supply more of a good or service, if the price per unit rises. If price rises then profits can rise as well.

A change in price causes a contraction or expansion of supply. These, as you will recall, are movements along a given supply curve.

The supply curve can shift (a movement of the whole curve, to the right or left) for a variety of reasons.

Key Concept : The supply curve shifts to the left or the right if all firms operating in the market are effected by the change in market conditions.

Supply can increase (a shift of the whole curve to the right) if new technology is developed, that reduces the cost of production. Before the improvement in technology, this firm could supply Qo of a good at price Po.

Adapting the new technology has lowered production costs. Now the firm can supply Q1 at price Po, and still make a profit.